Monthly Archives: October 2012

There will be change of guard at three atomic power stations, run by Nuclear Power Corporation of India Ltd (NPCIL), in Tamil Nadu, Karnataka and Gujarat, said an official.

NPCIL has appointed T.J. Kotteswaran as the station director for Madras Atomic Power Station (MAPS) effective from Wednesday. There are two 220 MW reactors at MAPS in Kalpakkam, around 70 km from here.

Earlier heading the third and fourth atomic stations at Kaiga in Karnataka, Kotteswaran’s transfer to MAPS comes due to incumbent K. Ramamurthy’s retirement Wednesday.
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1. With NSM Phase II round the corner what according to you will be the format of bidding and FiTs expected. Will there be even tougher Domestic Content Requirement in Phase 2?

As per our information and analysis in the October 2012 India Solar Compass, we expect that Phase 2 of the NSM will introduce Viability Gap Funding for project allocation. In this, the project asking for the least amount of funding from the government will obtain the projects. With regards to the Domestic Content Requirement, we expect that this will continue in Phase 2. In addition, we expect that it will be extended to some degree on thin film modules as well as opposed to only restricting crystalline modules at the moment.

2. As solar moves towards the grid parity the commercial market outside the FiTs is opening up. What does BRIDGE TO INDIA’s market insights says about this market.

Commercial parity driven markets are the most promising in India. There are some states where solar is already competitive with grid prices that commercial consumers are paying. In such states, BRIDGE TO INDIA is already developing business models for rooftop projects of 1MW and above. As the price of electricity in India rises and the costs of solar fall, there will be only be more states which will have this parity. At the same time, the government’s appetite for subsidizing large scale solar through FiTs and Viability Gap Funding is limited. We expect such government support to be phased out by 2017. Commercial parity driven, non-subsidized projects is where the market is heading.

3. Implementation of Renewable Purchase Obligation (RPO) is still questionable. This has started showing its effect on non-solar REC market. What will be its impact on solar industry?

The implementation of RPOs is one of the key bottlenecks on the regulatory side. This is adversely impacting the scaling of the REC market as well as the ability of developers to approach obligated entities directly for projects. So far, the market has relied on supply side pushes like FiTs under the NSM and the Gujarat Solar Policy. But, the demand side certainty, crucial for the long term planning of investors, is lacking. It also leaves banks questioning the feasibility of non-recourse based financing, which is crucial for a market to grow. The government needs to think about strengthening the implementation of RPOs to make the market growth sustainable, at least in the current stages when it relies on policies. Incentives for obligated entities to meet their RPOs might be an effective method to achieve this.

4. In the recent times we have seen module and cell manufactures going bankrupt. Is this a consolidation phase or is there something fundamentally wrong with solar Industry.

Indian manufacturers at the moment lack the technological leadership or price competitiveness which is crucial for any solar company to survive globally. Solar is now a global market and Indian players are facing the same problems that others have faced in Europe. Solar manufacturing has become about scale and vertical integration. Both strategies are currently lacking amongst Indian manufacturers, barring a few. They will have to make changes to this effect in order to make a turnaround. The Domestic Content Requirement will only have a positive effect, if at all, in the short term. For the long-term, Indian manufacturers need to understand the diverse segments in the Indian market and position themselves strategically based on their current strengths. There are many segments that international companies will find it impossible to sell and Indian players, with their local track-record and distribution networks, will certainly have an advantage.

5. What are your views on anti-dumping laws against foreign modules? Should these be imposed in India too?

This at best will be a short term measure. There is no way to constrain the free market. In reaction to the US anti-dumping duties, Chinese manufacturers have swiftly moved their facilities to Taiwan and are successfully evading the duties. The same would take place for India, if at the duties are imposed. There is no alternative to long-term, strategic support for Indian manufacturing as opposed to short term protectionis.

6. Investment is always an issue for Indian solar developers. How these can be improved? Does the government need to initiate some policies to raise the trust bar of investors?

Policy certainty and reliable irradiation data needs to be available for investors to trust take action on the promising fundamentals for solar in the market. The government is already taking action in this regard but much more needs to be done. Developers too need to make the effort to share generation data with the industry openly so that all stakeholders can access it and trust performance of plants in the market. As more plants have stable performance over time and as players build a track-record, banks and investors will be able to trust performance in the market better.

7. Tell us something about future plans of Bridge To India. Any new market intelligence tool BTI is launching soon?

BRIDGE TO INDIA is squarely focused on providing up to date, in-depth and reliable analysis on the Indian solar market. Our objective is to ensure that all the stakeholders understand the fundamentals in the market and have a long-term visibility of the development of the market. This ensures that players can develop sound strategies and can deliver with quality projects. This is crucial for the market to develop in a sustainable manner. We will continue to and increase the publication of our market reports. We want to provide strategic value to players through our analysis and strong market positioning through our sponsorship opportunities. In the future, as the market develops, we will look to provide a comprehensive, online market database of analysis for the Indian solar market.

Coal stock at Indian power plants has plummeted alarmingly to the lowest level in many years, making the country vulnerable to a blackout even if there is a small glitch in fuel supply or transportation.

Stocks at power stations last week dipped below the level last November 5,000 mw of generation had to be shut down following heavy rains, strikes at some mines and the Telangana agitation. Coal inventory decreased to 7.5 million tonnes as on October 21, about 13% less than available stock last month and in the same period last year, official data showed.

A top official at the Central Electricity Authority said the coal stock levels depleted since country’s coal production has not kept pace with the rise in power generation capacity.
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Towering over the waves of the Bay of Bengal, their blades whipping through the wind, hundreds of turbines dot the scenic vista along India’s southern coast, the country’s wind-power capital.

The turbines – each almost the height of a 20-storey building – produce enough electricity to meet the needs of about half a million homes each year, highlighting the potential of a freely available resource in the energy-hungry country.

Here, along a 120km stretch in the state of Tamil Nadu, the windmills generate more than 3,000MW of power, almost 1,000MW more than what a nearby nuclear power plant will produce when ready.

Helped by years of tax incentives for renewable energy, India is now the world’s fourth-largest wind-power market, although the bulk of the country’s energy still comes from coal and oil.

India, which suffers regular power shortages, has thousands of miles of coastline, and though windmills are expensive to make and install, early experiments with wind power have been promising.
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Wind energy giant Suzlon, once a star of India’s green technology, is facing a stormy future after aggressive expansion left it mired in debt at a tricky time for the industry, analysts say.

The world’s fifth-largest wind turbine firm this month made the biggest default on repayments by an Indian company, after bondholders rejected its request for a four-month extension to more than US$200 million of debt.

Investors are watching with concern to see if founder Tulsi Tanti can steer them out of a desperate fund-crunch over the coming crucial months, in an uncertain global business environment.
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Amid acute coal shortages hurting power generation, sectoral regulator CERC has said that fuel risk should not be “entirely” passed on to consumers.

The regulator’s suggestion to the Power Ministry comes at a time when there are concerns that expensive coal could push the electricity tariffs higher.

“We are of the view that the fuel risk should not be passed on to the consumers entirely,” the Central Electricity Regulatory Authority (CERC) said in its comments on the draft model power purchase agreement for public private partnership in electricity generation.
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The Power Ministry wants Coal India to allow power plants run by the same promoter to swap coal among the plants.

This means a company having projects at multiple locations is allowed to transfer or swap allocated domestic coal linkages amongst its own plants.

For instance, a private company which operates two units – one in Uttar Pradesh (with coal allocation from Eastern Coalfields Ltd) and another in Madhya Pradesh (with allocation from Northern Coalfields Ltd) – in order to cut transportation cost and time, can swap supplies.

The power plant in UP can buy from its nearest coal field and similarly the unit in Madhya Pradesh could source it from the mine that is near to the station.
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